Revenue vs. Vanity: The Metrics that Matter for Driving Growth

Analyzing Marketing's Vanity Metrics and How They Hurt Sales

It is common knowledge that although sales and marketing organizations are interdependent, they aren’t always aligned. While sales performance is straightforward — you either hit your revenue targets or you don’t — marketing performance tends to be a lot less black and white.  That’s one of the main reasons why it’s so common to find situations where marketing is hitting its goals, even when the sales team keeps missing its numbers.

When this is the case, there’s a very good chance that marketing is focused on the wrong things.

The reality is that marketing and sales performance are often measured against two very different (and often even conflicting) sets of KPIs. While Sales is oriented toward revenue, marketing is likely caught up in what is often termed as “vanity metrics” that — while great for measuring activity — have a very tenuous correlation to actual business outcomes.

One of the underlying reasons for this is that most marketing organizations take a very tactical approach to delivering leads to sales. They tend to focus on lots of individual tasks or campaigns — hosting webinars, publishing white papers, pay-per-click, etc. — rather than thinking about long-term, strategic approaches to Demand Generation. Practically speaking, that means that the output of their work is typically a high volume of relatively low-quality leads, delivered in campaign-based batches, that sales struggles to convert into actual customers.

Marketers have been attracted to response or engagement metrics because they’re a lot easier to measure than closed-loop revenue-based KPIs.

Let’s take a closer look at why vanity metrics aren’t particularly useful, and the kinds of KPIs that marketing teams should be focusing on that could more organically align with Sales and corporate growth goals.

Don’t Be So Vain: The Problem with Vanity Metrics

Historically, marketers have been attracted to response or engagement metrics because they’re a lot easier to measure than closed-loop revenue-based KPIs. Additionally, these kinds of metrics tend to go up in direct correlation with tactical activity, making them a very gratifying measure for campaign-focused teams.

Some examples of traditional marketing performance metrics include:

  • Number of visitors. A measure of how many people have come to your website during a particular period of time. Marketing teams tend to look at this number as a whole (which includes repeat visitors) and in terms of unique visits (which does not). Either way, it doesn’t reflect how many of those visitors are actually part of your target market, how many turned into leads, and how many of those leads turned into sales.
  • Number of page views. A count of the number of individual pages those visitors look at (or at least come to) during their visit. This number can then be divided by the number of visitors to calculate an average number of page views per visitor and per unique visitor but doesn’t account for the fact that all pages (and traffic) are not created equal. Traffic to a careers page is likely a job hunter, while a visit to the leadership page could be a someone trying to sell to you. While there is, of course, a correlation between page views and leads generated from the website, it’s vital to understand which pages are being viewed, why, and by who.
  • Open and click through rates. The percentage of people who open your emails and subsequently click on one of the links they contain. Of course, none of this necessarily translates into sales.
  • Number of subscribers. The number of people who have signed up for your newsletter or who have otherwise given you their personal contact information. Marketers view this as important because it gives them permission to actively reach out to those people with their marketing messages. Yet they have no indication as to the quality of those subscribers, and if they are representative of roles and companies that might actually buy.
  • Likes and shares. A measure of how many people engaged with your content on social media. However, just because someone liked or shared your content doesn’t mean they actually read it, or that they’re going to buy your product or solution.
  • Number of followers. The number of people who follow you on social media platforms like Twitter and LinkedIn. Unfortunately, following is an activity that rarely equates with engagement or a purchase.

The problem with “vanity” metrics is that they could mean something, but there’s not always a direct correlation between them and with buyer engagement that results in revenue.

The trait that qualifies these as “vanity” metrics is that they don’t necessarily have any impact on sales, but rather measure the results of tactical activities without closing the loop to revenue. Take visitors and page views as an example. You could have thousands of visitors come to your site and each visit a variety of pages. While certainly encouraging, none of those metrics are necessarily indicative of any true purchase intent on the part of those visitors. They might have come to your site through a random link, quickly poked around, and then left never to come back again.  All the more so if you’re leveraging content designed to drive traffic rather than to engage with buyers. “Clickbait” or other tactics to drive people to your site could help marketing meet visitor goals, while not driving traffic from actual buyers.

The problem with “vanity” metrics is that they could mean something, but there’s not always a direct correlation between them and with buyer engagement that results in revenue. Simply put, they don’t offer enough meaningful insight to identify if the engagement marketing has driven results in a sale. Plus, since they’re easy to measure (and simple to impact) without requiring the strategic thinking and execution that revenue-based metrics require, the C-Suite doesn’t always trust them.

Shifting Attention to Revenue Impact

To truly measure the effectiveness of what they’re doing, and to regain the trust of the C-Suite, marketing teams need to shift their focus to the revenue impact their work is having on the business. In other words, rather than focus on opens and clicks, they need to strive for quality over quantity and hone in on generating qualified leads that have the greatest potential to convert into opportunities and ultimately closed-won deals.

To do that, we recommend shifting your attention to three main areas:

  • How efficient you are at creating demand and shepherding people down the path to purchase. This is a direct measure of your ability to drive quality conversions, and requires a strategic, “closed-loop” approach to collecting all the data you need to track the path from initial engagement to revenue.
  • Which combinations of specific pieces of content and engagement channels (such as pay-per-click, webinars, content syndication, etc.) are most effective for reaching visitors that become customers. The closed-loop data mentioned earlier is critical to this end, so that you can focus budget and resources where they have the greatest impact.
  • The revenue impact that you’re having by understanding exactly how much of sales is marketing sourced (coming directly from marketing activity) or at least marketing influenced (existing customers or opportunities that have engaged with marketing). This requires planning on how to identify a marketing sourced lead, as well as how to collect engagement data from leads and opportunities that were not sourced by marketing.

If you want to drive growth, aligning your marketing KPIs to these three main areas will go much further to helping you generate high-quality leads and demonstrate your value to sales and the entire business.

The Final Word

Figuring out what metrics to use doesn’t have to be hard. With the help of the right agency, you can quickly determine not just what you want to measure, but also how to measure it. That includes what data to capture, how to capture it, and how to interpret the results. Armed with resulting insights, you’ll be well on your way to maximizing your impact.

ANNUITAS enable works with our clients to see exactly how our ANNUITAS Perpetual Demand Generation (PDG) programs are performing—and how they are contributing to revenue and growth. We back that up with ongoing strategic guidance on how to continuously improve performance across your entire demand ecosystem, from people and process to content and technology. Let’s Connect.

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